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Here are some tips when living on a budget. It is common for people to want to spend more money than they have on things about which they may not be in full control–from eating out too often, to buying items online, to spending indiscriminately. Engage in activities that you enjoy, but monitor your spending by tracking all of your purchases.
Tip #1. Living on a budget does not mean that you have to deprive yourself of the things you want. In fact, it is the opposite. If you live on a budget, then you can spend money on what matters most to you and still save for your future.
The key is to know how much money is coming in and how much needs to go out. Once you know what your financial goals are, then it becomes easier to set aside money for them. One method is the 50-30-20 rule. It is a budgeting technique that allocates your monthly income across three categories: essentials, needs, and wants. The essentials category covers 50% of the monthly income with needs covering 30% and wants 20%. This can be a useful tool for managing money as it promotes living on one’s means.
Tip #2. There is even a free budgeting app like Pocket Guard that can help you get started and track your savings. Be aware of your impulse buying habits and ask yourself if you are really going to need that item before you purchase it. It might be better to wait first so that you’re not spending money without a clear purpose in mind.
Developing a budget is important. If you’re one of those people who still have some money left over, then invest it in your future. There are many ways to do this and the key is to aim for at least three months of living expenses – saving in an online account every month can be a good way to start.
Tip #4. It seems like we spend a lot of money on things that we don’t need. We often buy expensive clothes or gadgets without thinking about how many other unnecessary expenses we have in our lives. It is easy to fall into the trap of spending more than you should and credit card debt can quickly pile up as a result. It is important to stay mindful of what you are spending your money on and to save up for the items you really want.
For more information on how to budget, check out, 7 Steps to a Budget That Works for You.
Tip # 3.
Spend your money consciously and don’t buy stuff that you don’t need. For instance, if you’re thinking about getting a new phone is the expense important right now, or will you save more to wait for a sale? We were able to get 4 new Samsung phones for $125 ($800 value) each at one of the booths set up in a local store. Looking for deals in your favorite clothing store? Sometimes you can get up to 70-80% off during seasonal or holiday events.
Tip #5. A flea market, Facebook marketplace and E-Bay are great places to sell no longer needed items in your home. Undoubtedly, you can make hundreds of dollars and declutter your home.
Tip #6. With interest rates on the rise and an uncertain economy, many people are looking for ways to save money. One practical way of doing this is to transfer debt from a high-interest credit card account to a 0% balance transfer credit card that will not charge any additional fees or penalties for transferring balances.
This often starts at about 2-4%, but may be higher or lower depending on the terms and features offered by your particular card. A good analogy would be if you borrowed $50,000 from someone for 5 years at 6% interest, you would owe $59,600.
Tip #7. Nowadays it’s so easy since most stores have cards that can attach to the app on your phone. Clearly, you can simply click coupons. Many stores offer special deals and store credit. For example, CVS will give you $10 a month in store credit. With coupons and store credit, you can definitely purchase $30 worth of items for $5 or 6 dollars and get money back!
